Monday, December 14, 2015

The same kind of thinking?

We are among the happiest people if not the happiest; and a most resilient people? Consider this reality that we seem to have more than our fair share: “Poverty alleviation is the main concern of many countries. Poverty is said to be an economic, social, cultural, political and moral phenomenon. Like the issue, its solutions are multi-faceted. It requires a collective action from governments, corporations, citizens, consumers, workers, investors and educators . . . The country’s poverty is more of a shameful condition than a pitiful one. It has not substantially improved since the 1990s.” [Ethical business actions and poverty reduction, Marie Annette Galvez-Dacul, Green Light, The Standard, 6th Dec 2015]

“Economic Growth Didn’t Ease Poverty,” Benjamin E. Diokno, Core, Business World, 8th Dec 2015. “The first Millennium Development Goal (MDG) is to halve poverty incidence by 2015. Despite the above normal economic growth during the last four years, the Philippines will miss this goal. By contrast, the same goal has been reached globally in 2000, five years ahead of schedule.” [Economic Growth Didn’t Ease Poverty, Benjamin E. Diokno, Core, Business World, 8th Dec 2015]

“Likewise, our ASEAN-6 (Association of Southeast Asian Nations) neighbors -- Indonesia, Malaysia, Singapore, Thailand, and Vietnam -- have met this lofty goal many years ago. This suggests that our Asian peers are doing things right while we continue to muddle through.”

We continue to muddle through? “To argue that jeepneys should not be phased out because they are a tradition is to say we never should have stopped burning wood for fuel . . . The romanticized notion that the jeepney is a testament to Filipino ingenuity and resourcefulness because it was built out of army jeeps left behind by the US forces after World War II is today as outdated as the vehicle itself. We need a better symbol of Filipino ingenuity and resourcefulness—preferably one that doesn’t belch smoke.” [Smokescreen arguments, Editorial, The Standard, 9th Dec 2015]

“We can't solve problems by using the same kind of thinking we used when we created them.” [Albert Einstein]

“Mar . . . feels that the Aquino administration has achieved what no other Chief Executive before him has done – turn the economy around and plant the seeds of good governance. Aquino put the nation in a position of strength by improving its relationships with its stakeholders (creditors, investors, trading partners, the public, etc.) and fixing the nation’s Balance Sheet, so to speak. He believes that the best way to move the country forward is to continue the development path PNoy has started. He presents himself as the proponent of that path.” [The difference between Grace and Mar, Andrew James Masigan, Manila Bulletin, 6th Dec 2015]

“What happened to the hundreds of billion pesos of cash transfers distributed by the government? On the President’s request, Congress has approved a total of P229.8 billion from 2011 to 2015 . . . The counterfactual argument, of course, is that the poverty picture could have been worse had the Conditional Cash Transfer (CCT) program not exist. But could the P229.8 billion have been better targeted? And could the cost of administering the CCT program have been minimized? The next administration should review the program with the view of making it more cost-effective . . . Strong, sustained growth is a necessary condition for poverty reduction, but it is not a sufficient one. It matters where growth is coming from, and whether it is inclusive.” [Diokno, op. cit.]

Does it mean then that allocating money even in the billions isn't the answer to poverty? President Ramos said it best, “we need to enlarge the pie.” In other words, PHL’s GDP per person has remained at Third-World levels, a mere fraction compared to those of our neighbors, and billions in CCT money by definition will not raise our average income or enlarge the economic pie?

And there are factors that are imperative to raise economic output especially for an underdeveloped economy. And topping the list would be infrastructure development and industrialization, the hard elements that drive a nation’s competitiveness. Yet for the longest time we’ve been unable to focus on them – a reflection of our inability to prioritize?

Where is it coming from? The absence of visionary and strategy leadership and our crab mentality – a double whammy; and given our parochial bias and values of hierarchy, political patronage and oligarchy they yield a perfect storm – undermining the common good and nation building?

Of course we have the money (FX reserves or GIR) that makes the CB proud although we would rather be silent about the source: the blood, sweat and tears of over 10 million OFWs! And because they prop our oligarchic economy and enrich the few, we like to think we're fine and dandy? Why rock the boat? All we need is CCT to placate the poor? It’s the economy, stupid!

And there are the soft elements too. “In the latest World Economic Forum Global Competitiveness report, 2015-2016, ‘inefficient government bureaucracy’ climbed to the top spot as the most problematic factor for doing business in the country, from last year’s fourth place. Moreover, ‘complexity of tax regulations’ ranked fourth, whereas elsewhere in the ASEAN it is not in the top 5 concerns.” [Reduce regulatory burden (!), Romeo Bernardo, Introspective, Business World, 6th Dec 2015]

“The World Bank has earlier warned that ‘Certain tax policy regimes are both inefficient and detrimental to job creation. Enforcing the current weak tax design may yield more revenues but will have adverse impacts on jobs’ (World Bank, “Philippine Economic Update,” 2014).

“Then there are the big disputes arising from sudden idiosyncratic reinterpretation by regulatory bodies of contracts after more than a decade of being implemented and celebrated as successful examples of public-private partnerships. I refer to the two water concessions of the Metropolitan Waterworks and Sewerage System, the Shell-Oxy Malampaya project, and the Manila North Tollways Corp.; all are now or about to enter international arbitration initiated by the private parties against government for non-implementation of contracts in amounting to several tens of billions of pesos.

“How can Public-Private Partnership (PPP) projects for infrastructure . . . take off unless government can provide greater regulatory clarity and stability? To keep in step with our neighbors, a comprehensive regulatory package must be part of next administration’s reform pillars.

“NEDA Deputy Director General and University of the Philippines Professor Emmanuel F. Esguerra identified elements from OECD and ASEAN for best practices for good regulation . . .

“Beneath technocratic language is the political reality of bureaucratic inertia and entrenched interests in the status quo labyrinth that must be overcome. Hopefully, our next leader will have the vision and political will and skill to take on this difficult but necessary task for the Philippines to truly travel the “tuwid na daan” to inclusive investment-led growth.”

That’s a challenge that can't be underestimated: we can't solve problems by using the same kind of thinking we used when we created them. And in today's digital age, Steve Jobs would add: creativity is connecting the dots. And that is as much a challenge given the specialization and linear thinking inherent in higher education.

And not surprisingly, the engineer in Steve Wozniak (who cobbled together the first Apple) saw the weakness in Jobs (the college dropout) technology-wise, and to Jobs that was just fine: he wanted to change the world. And Apple had to be more than a discipline or an expertise. Steve Jobs wanted to create an altogether new ecosystem. Which explains why the traditional giants in corporate America were relegated to the sidelines. Yes, even a supposedly fully developed environment can be transformed.

But which we Pinoys have yet to visualize – even when our underdevelopment in fact gives us a whole lot of playing field!

Where is it coming from? Our inability to raise our level of consciousness because we see ourselves as the chosen few and have attained wisdom? Enter Francis: are we suffering from neurosis or leprosy?

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

Genesis of this Blog

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Advocacy

About Me

I started writing to columnists and newspaper editors at the end of a trip to the Philippines over Holy Week in 2008 – to echo the frustrations expressed by friends and relations that were much louder and more intense than prior trips. My first thought was: with so much talents and skills how could the country be the basket case of Asia? Are we simply too nice as a people? Since then I have kept abreast with local news and opinions.
I have been a business consultant (since 2003) focused on Eastern Europe. My principal client in Bulgaria, a consumer-products maker, was chosen by the European Business Awards in 2011 as among Europe’s best from the 15,000 companies vetted for the selection. I started my career in 1968 in human resources in the Philippines. I then joined a Fortune 500 company in 1981, working with its Manila subsidiary for seven years and later moved up to its Asian regional headquarters and finally assumed a global responsibility (in global strategy, organization and business competitiveness) until my retirement. I have likewise done consulting work in the Philippines. I live with my family in Stamford, Connecticut, USA.